Washington Briefs

House passes cyber security bill, despite privacy concerns

The House passed a controversial cyber security bill, but privacy advocates vow to defeat its information-sharing provisions when the battle moves to the Senate.

The Cyber Intelligence Sharing and Protection Act passed on a 248-168 vote April 26. CISPA allows businesses and government intelligence agencies to share information about cyber threats with each other – something proponents said is essential in order to guard against cyber attacks that could cripple the economy. Opponents of the bill, however, said it would enable intelligence agencies to get their hands on data about individuals’ Internet use.

The White House shares these privacy concerns and issued a statement indicating President Barack Obama would veto the legislation. But in one area, the legislation didn’t go far enough for the White House: It supports a bill pending in the Senate that would impose minimum standards for guarding against a cyber attack on critical infrastructure systems, such as telecommunications.

Republicans oppose this expansion of the government’s regulatory power.

Many business groups supported CISPA.

“The United States cannot afford to wait to improve our nation’s cyber security posture,” said Shawn Osborne, president and CEO of TechAmerica, an advocacy group for technology companies. “Standing pat will only further risk our national security.”

Bruce Josten, the top lobbyist for the U.S. Chamber of Commerce, urged House members to vote for the legislation because the bill “would help tip the scales in businesses’ favor against online raiders who seek to steal trade secrets or potentially disrupt infrastructure networks.”

Josten noted that information sharing about cyber threats would be voluntary, and that the government could not compel private companies to “hand over personal information.”

Those assurances aren’t enough for privacy advocates.

“Hundreds of thousands of Internet users spoke out against this bill, and their numbers will only grow as we move this debate to the Senate,” said Rainey Reitman, activism director for the Electronic Frontier Foundation. “We will not stand idly by as the basic freedoms to read and speak online without the shadow of government surveillance are endangered by such overbroad legislative proposals.”

Student loan legislation passed

The House passed legislation that would prevent interest rates on federal loans to college students from doubling July 1.

That may sound like good news to more than 7 million college students who rely on these loans, but there’s a catch. The House bill, which passed on a 215-195 vote, covers the $6 billion cost of avoiding this interest rate hike by raiding a preventive care fund created by health care reform. That idea is going nowhere in the Senate, and the White House threatened to veto the bill because of this provision.

“This is a politically motivated proposal and not the serious response that the problem facing America’s college students deserve,” the White House said.

Senate Democrats want to pay for the one-year student loan fix by forcing some S corporation shareholders to pay Social Security and Medicare payroll taxes on their income. Republicans contend this would be a tax increase on small businesses, since many are S corporations.

If the House and Senate can’t agree on how to pay for the bill, interest rates on new federally funded Stafford Student Loans will increase from 3.4 percent to 6.8 percent on July 1.

“Nobody wants to see student loan interest rates go up,” said House Speaker John Boehner, R-Ohio.

Well, then “bring back a bill you know will pass,” said House Minority Whip Steny Hoyer, D-Md.

The Senate will take up its student loan bill the week of May 7.

More demand for business loans

Banks are seeing increased demand for business loans and commercial real estate loans, according to a new Federal Reserve survey of senior lending officers.

Many banks are also easing terms on business loans, and some are easing terms on commercial real estate loans, as well. That’s because they’re seeing more aggressive competition from other lenders, according to the quarterly survey.

More businesses are inquiring about obtaining or increasing credit lines, according to the survey. Some of that demand is due to the desire to shift borrowing from other loans, but some of it is due to businesses’ desire to finance inventory or invest in new equipment – a good sign for the economy.

A separate survey of small-business owners also offers some good news about credit. A survey conducted by Gallup for Wells Fargo found that 30 percent of small-business owners found it difficult to get credit in the past 12 months, down 3 percentage points from January. The number of small-business owners who expect they’ll have problems getting a loan over the coming 12 months fell to 32 percent from 38 percent.

Nearly one-third of small-business owners say they are carrying less debt now than a year ago, compared with 20 percent who have more debt, and 47 percent who say their debt is about the same.

“Many business owners who took on a significant amount of debt before or during the Great Recession have been focused on paying down existing debt and putting their business in a better position as the economy recovers,” said Marc Bernstein, who heads Wells Fargo’s small business division.

Nearly 40 percent of small-business owners say they were able to obtain all the credit they needed over the past year. Only 20 percent said they weren’t able to get the credit they needed. The survey found that 38 percent said they didn’t require any credit.